Supermarket Pricing Model Impact on Private Label Brands versus National Brands among Millennial Consumers

Abstract

National Brands (NBs) and private label brands (PLBs) play a vital role in manufacturing and retailing strategies.  Market share growth of PLBs over the past few decades continues to level the playing field; altering go-to-market strategies for both NB and PLB manufacturers and retailers.  A quantitative examination compared purchase data between NB versus PLB using panel data from 100,000 households.  Consumer metrics; trip conversion, buyer conversion, and dollar loyalty served as dependent variables interacting with a multivariate grouping of branding (NB vs. PLB), grocery pricing model (Hi-Lo vs. EDLP vs. Hybrid) and age-cohort (Millennial vs. Generation X).  A MANOVA provided findings to support significance levels <.001 in buyer conversion and dollar loyalty scores, when comparing NB vs. PLB across grocery pricing model.  Results support previous studies aligning purchase propensity for NB at Hi-Lo retailers while PLB has higher mean scores for buyer conversion and dollar loyalty at EDLP retailers.